Mumbai: Tata Sons, the holding company of Tata Consultancy Services (TCS), plans to sell 23.4 million shares in India’s largest software services exporter for at least ₹9,300 crore on Tuesday, showed a term sheet issued by JP Morgan, the banker to the deal. The floor price for the stock, amounting to 0.65% of the company’s equity base, has been set at ₹4,001 apiece, representing a discount of 3.6% to Monday’s closing price.

As of December 31, 2023, Tata Sons held a 72.38% stake in TCS. The stock slid 1.75% to ₹4,144.75 on the BSE Monday. TCS has a market capitalisation just north of ₹15 lakh crore – nearly half the total market value of all the Tata Group listed companies at ₹31.09 lakh crore.

The stock, the second-biggest by value in the country, has surged 30% in the past one year, underpinned by a buyback programme.


Strategic Investments
The buyback plan helped TCS stock partially mitigate the impact of muted business expansion in the company’s primary revenue markets – the US and Western Europe.

Tata Sons chairman N Chandrasekaran said last month the group would make a significant investment in electronics and semiconductors, including the establishment of a specialised factory for semiconductor production across multiple nodes. Chandrasekaran emphasised that Tata has made strategic investments for the future, and that semiconductors is one of them.

The Tata Group is establishing the country’s first semiconductor fabrication plant at Dholera, in Gujarat, with an investment of Rs 91,000 crore. Tata is also setting up Tata Semiconductor Assembly and Test’s upcoming chip assembly and testing unit in Assam, with an investment of Rs 27,000 crore.

Tata Sons plans to invest another $1 billion in Tata Digital over the next few years. It has already invested more than $2 billion in the Neu app and has board approvals for further capital infusion over a five-year period.

TCS bought back 40.9 million shares in December for Rs 17,000 crore. As a result of the latest buyback, the combined shareholding of the promoting entity in the biggest Tata Group company increased to 72.41% from 72.3%.

Listing Plans
Separately, Tata Sons, which owns Tata Capital, is required to list by September 2025 to comply with Reserve Bank of India regulations.

Earlier ET reports indicated that Tata Sons is working on restructuring itself to comply with central bank norms. This follows RBI’s refusal of an informal request to grant exemptions from the mandated listing of so-called ‘upper layer’ NBFCs. Tata Sons serves as the holding company of the Tata Group.

One of the options under consideration may involve transferring the holding in the financial services company, Tata Capital, to another entity as this is likely to be a key reason for Tata Sons being categorised in the ‘upper layer’, according to an executive familiar with the matter. Multiple options were being explored, official sources earlier told ET.

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